T.C. M em o . 2 0 2 1 -3 1

UNITED STATES TAX COURT
BRIAN E. HARRISS, Pet i t i o n er v . COM M ISSIONER OF INTERNAL REVENUE, Res po n d en t

Do ck etNo s . 2 3 0 1 7 -1 7 , 5 6 90 -1 8
. Fi l edM arch 1 1 , 2 02 1
.

Bri an E. Harri s s , p ro s e. J o h n T. Arth ur an dCo u rt n ey S. Baco n , fo r res p o nd en t.

M EM ORANDUM FINDINGS OF FACT AND OPINION THORNTON, Jud g e: By s ep arat e n o t i ces o f d efi ci en cy , res p o n den t d et erm i n edd efi ci en ci es i n p et i t i o n er’ s Fed eral i n co m e t ax an d s ect io n6 66 2 (a)
accu racy -rel at edp en al ti es as fo l l o ws : 1

1 Al l m on et ary

am o u n t s are ro un d edt o th e n eares td o l l ar. Al l Ru le referen ces are t o th e Tax Co u rtRu l es o f Pract i ce an dPro cedu re, an dal l s ect i o n (co n ti n u ed ...) Served 03/11/21- 2
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Year Defi ci en cy Pen al ty s ec. 6 6 6 2 (a) 20 1 2 $ 3 1 ,8 6 2 $ 1 , 7 37 20 1 3 4 6 ,6 92 9 ,1 0 0 20 1 4 4 3 ,7 30 8 , 3 91 Aft er co n ces si o ns , 2 th e i s s u es fo r d eci si o ni nth es e co n so l i d at ed cas es are: (1 ) wh et h er t h e n o t i ces o f d efi ci en cy are v al i d; (2 ) wh et her p et i t io n er h ad
u n rep o rt edg ro s s i n co m e fo r t ax ab l e y ears 2 0 1 3 an d2 0 1 4 as res p o n d en t d et erm i n ed ; an d(3 ) wh et her fo r t ax ab l e y ear 2 0 1 3 p et i t i o ner i s l i ab le u nd er
s ect i on 7 2 (t ) fo r a 1 0 % ad d i ti o nal t ax o n an earl y d i s tri b u t io n fro m

a qu al i fi ed ret i rem en tp l an . FINDINGS OF FACT Du ri n g 2 0 1 2 , 2 01 3, an d2 0 1 4 , CH2 M Hi ll Al as k a, In c. (CH2 M ), p ai d p et i t i o n er $ 1 4 6 ,0 0 3 , $ 1 4 9 ,8 0 2 , an d $ 1 6 5 ,0 1 1 , res pect i v el y , fo r s erv i ces p erfo rm ed
an d rep o rt edth es e am ou n t s o n Fo rm s W -2 , W ag e an dTax St at em en t . In2 0 1 4 An v i l Co rp . (An v i l ) p ai d p et i t io n er $ 1 0 ,5 8 9 fo r s erv i ces p erfo rm edan drep o rt ed th i s am o u n to n Fo rm

W -2
. [* 2 ]

1 (...co n t in u ed ) referen ces are t o th e In t ern al Rev en u e Co d e i n effect fo r t he y ears ati s s u e.

2 Res p o n d en th as co n ced edth at th e l i m i t at i o n s p eri o d h as ex p i redfo r t ax ab l e y ear 2 0 1 2 an d h as al so co n ced edthe s ec. 6 6 6 2(a) p en al t i es fo r al l y ears ati s s u e.- 3
-

[* 3 ] OnFo rm

1 0 9 9 -R, Di s tri b u t i o n s Fro m Pen si o n s, An n u it i es , Ret i rem en t s o r Pro fi t -Sh ari n g Pl an s , IRAs , In s u ran ce Co n tract s , et c., Fi d el it y In v es t m en t s (Fi d el i ty ) rep o rt edth ati n 2 0 1 3 i tm ad e a ret i rem en tp l an d is tri bu t i o nt o p et i t i o n er
o f $ 3 6,8 3 0 . Th e d i s tri bu t i o n co d e o nth i s fo rm d es cri b edth e d i s tri b u t i o nas an

“ Earl y d i s tri b u t i on , n o kno wnex cep t i o n (i n m o s tcas es , u n d er ag e 5 9 1⁄2 )” an d
s t at edth atth e “ [t ] ax ab le am o u n t ” was $ 36 ,8 3 0
. OnAp ri l 1 5 , 2 0 1 4, p et i t i o n er u n t i m el y fi l edh i s Fo rm

1 0 40 , U.S. In d i v i du al In co m e Tax Return , fo r t ax ab l e y ear 2 0 1 2 , rep o rt i n g zero wag es an dcl ai m i n g a $ 3 0 ,1 5 2 refu ndfo r al l h i s rep o rt edwi th h o l d in g s fo r i n co m e, So ci al Secu ri ty , an d M ed i care t ax es . Att ach edt o p et i t i on er’ s 2 0 1 2 Fo rm 1 0 4 0 was Fo rm

4 85 2 , Sub s ti tu t e fo r Fo rm

W -2 , W ag e an dTax St at em en t , o r Fo rm 1 09 9 -R, Di s tri b u t i o n s Fro m Pen s io n s , An nu i t i es , Ret i rem en to r Pro fi t -Sh ari ng Pl an s , IRAs , In s uran ce Co n tract s , et c., b y

wh i ch pet i t i o n er p u rp ort edt o co rrect th e Fo rm W -2 fro m CH2 M s o as t o rep o rtwag es , t i p s , an do th er co m p en s at i on o f zero . Pet it i on er al s o at t ach edt o h is 2 0 1 2 Fo rm 1 0 4 0 a l et t er ad dres s edt o th e Dep art m en to f t h e Treas u ry , d i sp u t i n g th e $ 1 4 6 , 0 0 3 th atCH2 M h adrep o rt edas wag es an ds t at i n g :

“ M y act i v i ti es i n 2 0 1 2 i nv o l v eden t irel y p ri vat e arran g em en ts an dd i d n o t i n v o l v e th e ex erci s e o f an y fed eral p ri v i l eg e o r t h e recei pto f an y fed eral l y -co n n ect edg ai n
o r b en efi t .”- 4
-

[* 4 ] Pet i t i o ner’ s Fo rm

1 0 4 0 fo r t ax ab l e y ear 2 0 1 3 rep o rt ed zero wag es an dzero t ax ab l e IRA d i s tri b ut i o n s ; h e cl ai m eda $ 1 0 ,4 1 0 refu n dfo r al l h is rep o rt ed wi th h o l d i n g s fo r i n co m e, So ci al Secu ri ty , an dM ed i care t ax es . Att ach edt o th i s Fo rm 1 0 4 0 was Fo rm

4 8 5 2, b y wh i ch p et i t io n er p u rp o rt edt o co rrect th e Fo rm W -2 fro m CH2 M s o as t o rep o rtwag es , t i ps , an do th er co m p en s at io no f zero . Ina l et t er at t ach edt o h is 2 0 1 3 Fo rm 1 0 4 0 p et i t io n er ex p l ai nedth e p u rp o s e o f t h i s Fo rm 4 8 5 2 as -- co rrect i ng a W -2 fo rm

th atrep o rt eda p aym en tt o m e o f wag es as d efi n edi n t h e Co d e. Th e am o u n to f $ 14 9 ,8 0 2 .0 0 o ri g i n al l y rep o rt ed i s i n co rrect an di s h ereb y d is p u t ed . Th e p ay er, CH2 M HILL Al as k a, In c. i s a co m

p an y i n co rp o rat edi nth e s t at e o f Al as k a wi th wh om I wo rk ed u n d er a p ri v at e arran g em en to n n o n -t rad e o r b us i n es s act i v i t i es . Al s o at t ach edt o p et i t i o n er’ s 2 0 1 3 Fo rm 1 0 4 0 was Fo rm

4 8 5 2, b y wh i ch p et i t i o n er p u rp ort edt o co rrect th e Fo rm 1 0 9 9 -R fro m

Fi d el i ty s o as t o rep o rtFi d el i ty ’ s $ 3 6 ,8 3 0 d i s tri b u t i o n t o h i m as n o n t ax ab l e. A l et ter at t ach edt o p et it i on er’ s 2 0 1 3 Fo rm 1 0 4 0 ex pl ai n edth atth e p u rp o s e o f t h i s Fo rm 4 85 2 was t o co rrect th e Fo rm 1 0 9 9 -R t h at “ erro n eo u s ly rep o rt edIRC 6 0 4 7 tran s act i o ns .” Pet i t i o ner’ s Fo rm

1 0 4 0 fo r t ax ab l e y ear 2 0 1 4 rep o rt ed zero wag es an d cl ai m eda $ 1 2 , 2 3 0 refu n d fo r al l h i s rep o rt edwi thh o l d i n g s fo r i n co m e, So ci al Secu ri ty , an d M ed i care t ax es . Att ach edt o thi s Fo rm 1 0 4 0 were Fo rm s 4 8 5 2 , b y- 5
-

[* 5 ] wh i ch p et i t io n er p u rp o rt edt o co rrect th e Fo rm s W -2 fro m CH2 M an dAn v i l
s o as t o rep o rtwag es , t i ps , an do th er co m pen s at i o no f zero
. OnAu gu s t2 , 2 0 1 7 , th e In t ern al Rev en u e Serv i ce (IRS) i s s u edt o p et i t i o n er
a n o t i ce o f d efi ci en cy

fo r t ax ab l e y ear 2 0 1 2 , d et erm i n i n g a d efi ci en cy o f $ 31 ,8 62
. Th e n ot i ce ex p l ai n edth atth e IRS h adad ju s t edp et i ti o n er’ s g ro s s wag es t o $ 1 4 6 ,0 0 3 as s h o wno n Fo rm W -2
. OnAu g u s t2 2 , 2 0 1 7 , th e IRS i s s u edt o p et it i o n er a n o t i ce o f d efi ci en cy fo r t ax ab l e y ear 2 01 3 , d et erm i n i n g a d efi ci en cy o f $ 4 6,6 9 2 . Th e n o t i ce ex p lai n edth at th e IRS h adad

ju s t edp et i t i o n er’ s g ro s s wag es t o $ 1 4 9,8 0 2 as s h o wno nFo rm W -2
. Th e n ot i ce al s o ad

ju s t edp et i t i o n er’ s g ro s s i n co m e t o i ncl u d e t h e $ 3 6 , 8 3 0 d i s tri b u t i o n rep o rt edb y

Fi d el i ty o nFo rm 1 0 9 9-R an d i m

p o s ed$ 3 ,6 8 3 o f ad d it i o n al t ax fo r an earl y d i st ri b u t i o n , p urs u an t t o s ect i on 7 2 (t ). OnDecem

b er 2 0 , 2 0 1 7 , th e IRS i s su edt o p et i t io n er a n o ti ce o f d efi ci en cy fo r t ax ab l e y ear 2 0 14 , d et erm i n i n g a d efi ci en cy o f $ 4 3 , 7 3 0 . Th e n o t i ce ex p l ai n ed th atth e IRS h adad

ju s t edp et i t i o n er’ s g ro s s wag es t o $ 17 5 ,6 0 0 as s h o wno n Fo rm s W -2
. Th e s i g n atu re b l o ck s fo r th e n o t i ces o f d efi ci en cy fo r t ax ab l e y ears 2 0 1 2 , 2 0 1 3 , an d2 0 1 4 each s t at e i d en t i cal l y “ Co m m i s s i o ner By Ch ri s t i n e L. Dav i s ,- 6
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[* 6 ] Pro g ram

M an ag er, Ret u rnIn t eg ri ty an dCo m p l ian ce Serv i ces , In t eg ri ty an d Veri fi cat i o n Op erat i o n ” an d i n cl u d e t he s ig n atu re o f Ch ri s ti ne L. Dav i s. Pet i t i on er, wh i l e res i d i n g i nAl as ka, t i m el y fi l edp et i t i o n s co m

m en ci n g th es e cas es , wh i ch were s ub s equ en t l y co n s o l i d at ed an d s etfo r t ri al
. 3 Ab o uttwo week s b efo re t h e s ch edu l edtri al d at e p et i t i o n er fi l eda m ot i o nt o d i s m i s s t h es e
cas es fo r l acko f juri s d i ct i o n . Th e Co u rth el d a h eari n g o np et it i o n er’ s m o t i o nt o d i s m i s s i n co n

jun ct i on wi th the p rev i o u s ly s ch edu l edtri al . Pet i t io n er ch o s e n o tt o t es t i fy at th e t ri al , p l ead i n g th e Fi ft h Am en d m en t i nres p o n se t o res p o n d en t ’ s qu es ti o n s . OPINION I. Val i di ty

o f No ti ces o f Defi ci en cy Pet i t i o ner h as m o vedt o d i s m i s s th es e cas es o n t h e g ro u n dth at the n o t i ces o f d efi ci en cy

are i n v al i d . W i th res p ectt o t ax ab le y ears 2 0 1 3 an d2 0 1 4 h e as s ert s th at

3 OnJ u l y 1 7, 2 0 1 9 , p et i t i o n er fi leda m o t i o nfo r s u m m ary ju d g m en t, as s ert i n g am o n g o th er t h i n g s th atth e ap p l icab l e l i m i t at i o n s p eri o dfo r as s es s m en t h ad ex p i redfo r h i s t ax ab l e y ear 2 0 1 2 . Inres p o n s e, res p o n d en tco n ced edth atth e 2 0 1 2 l im it at io n s p eri o d h adex p i red
. Res po n d en t al s o co n ced edth e s ec. 6 6 6 2 (a) p en al ty fo r each o f p et i t io n er’ s t ax ab l e y ears 2 0 12 , 2 0 1 3 , an d2 0 1 4 . Onth e b as i s o f res po n d en t ’ s co n ces s i o ns , o n Au g u s t2 2 , 2 01 9 , th e Co u rt g ran tedp et i t i o n er’ s m o ti o n fo r s u m

m ary ju d g m en tas i t rel at es t o th e d efi ci en cy fo r h i s t ax ab l e y ear 2 0 1 2 an das i t rel at es t o th e s ec. 6 6 6 2 (a) p en al t i es fo r al l y ears ati s s u e b u t d en i ed p et i t i o n er’ s m o t io n fo r s u m m ary ju dg m en tas i trel at es t o h i s d efi ci en ci es fo r t ax ab l e y ears 2 0 1 3 an d2 0 1 4
.- 7
-

[* 7 ] th e n o t i ces are i n v al i db ecau s e, h e s ay s , th e s i g ner o f th es e n o t i ces , Ch ri s t i n e L. Dav i s , l ack edp ro p er d el eg at edau th ori ty t o s i gn an di s s u e t h em . 4 Sect io n 6 2 1 2 (a) p ro v i d es : “ If t h e Secret ary d et erm i n es th atthere i s a d efi ci en cy

i n res p ect o f an y

t ax i m p o s edb y s ub t i t les A o r B o r ch ap t er 4 1 , 4 2 , 4 3 , o r 4 4 h e i s au th o ri zedt o s en dn o t i ce o f s uch d efi ci en cy t o th e t ax p ay er b y

cert i fi ed

4 Al th o ug h Ch ri s t i n e L. Dav i s al s o s i g n edth e 2 0 1 2 n o ti ce o f d efi ci en cy , p et i t i o n er h as n o tex p res s l y as s ert edth at i t i s i n val i d fo r l ack o f p ro p er d el eg at ed au th o ri ty . Rat h er, i ns o far as h e ch al l en g es thi s Co urt ’ s juri s d ict i o nas t o h i s 2 0 1 2 t ax ab l e y ear, p et i t i o n er ap p ears t o rel y up o nres p o n den t ’ s s t at em en t, i nh i s res p o n s e t o p et i ti o n er’ s m o t i o n fo r s u m m ary ju dg m en t , th at th e 2 0 1 2 n o t i ce o f d efi ci en cy

“ was u n ti m el y

an dth erefo re i n val i d.” No twi th s t an d i n g res po n d en t ’ s i l l-co n s i d ereds t at em en t , o u r ju ri s d i ct io ni s n o ti m p li cat edb y

o u r accep t i n g res p o n d en t’ s co n ces s i o n as t o th e ex p i rat i o no f th e l i m i t at i on s p eri o dfo r 2 0 1 2
. “ [I] ti s wel l es t ab li s h edth atth e i s s u an ce o f a n o t i ce o f d efi ci en cy b ey on dth e s t atu te o f l i m i tat i o n s p eri o dd o es n o t[a] ffecti t s v al i d i ty . Th e s tatu t e o f l i m i t at i o ns i s a d efen s e i n b ar an dn o t a p l ea t o th e ju ri s d i ct io no f th is Co u rt .” Gen es i s Oi l & Gas , Lt d . v . Co m

m i s s i on er, 9 3 T.C. 5 6 2 , 5 6 4 (1 9 8 9 ); s ee Tap per v . Co m m i s s i o n er, 7 6 6 F.2 d4 0 1, 4 0 3 (9 th Ci r. 1 9 85 ); Do m u l ewi cz v . Co m

m i ss i o ner, 1 2 9 T.C. 1 1 , 1 2 n .4 (2 0 0 7 ), aff’ di n p art , rem an d edi np arto no ther g ro u n d s s ub n o m . Des m etv . Co m m i s s i o n er, 5 8 1 F.3 d2 9 7 (6 th Ci r. 2 0 09 ); Cro wel l v . Co m m i ss i o ner, 1 02 T.C. 6 8 3 , 6 9 3 (1 9 9 4); Un i t edBu s . Co rp . o f Am . v . Co m m i s s i o n er, 1 9 B.T.A. 8 0 9 , 8 3 1 (1 9 3 0) (“ [T] h e p ro po s i t io n th ata s t atu t e o f l i m i t at i o n s i s a d efen s e i n b ar an dn o ta p l ea t o the ju ri s d i ct i o n wo u l ds eem t o req u i re n o ci t at i on .”), aff’ d, 6 2 F.2 d7 5 4 (2 d Ci r. 1 9 33 ). In d eed , o u r g ran t i ng o f p et i t i o n er’ s m o t io n fo r s u m m ary ju d g m en ti n p artas i t rel at es t o h i s 2 0 1 2 t ax ab l e y ear d ep en d s up o no u r h av i n g juri s d ict i o n o v er t h aty ear. In an y

ev en t , b ecau s e t he s i g n atu re b l o cko f th e 2 01 2 n o ti ce o f d efi ci en cy

i s es s en t i al l y i d en ti cal t o t h e s i g natu re b l o ck s o f t h e 2 0 1 3 an d 2 0 1 4 n o t i ces o f d efi ci en cy , o u r an al y s i s wi th res p ectt o th e v al i d i ty o f t h e 2 0 12 n o t i ce o f d efi ci en cy , i f p et i t i o n er h adex p res s l y ch al l en gedi to nthe g ro u n do f l acko f p ro p er d el eg at edau th o ri ty (wh i ch h e h as n o t), wo ul db e es s en t i al ly i d en t i cal t o o u r an al y s i s wi th res p ect t o th e 2 0 13 an d2 0 1 4 n o t ices o f d efi ci en cy .- 8
-

[* 8 ] m ai l o r reg i s t eredm ai l .” Sect i o n7 7 0 1 (a)(1 1 )(B) d efi nes “ Secret ary ” t o m ean

“ th e Secret ary o f t h e Treas u ry o r h i s d el eg at e.” In th is co n t ex t “ d el eg at e” m ean s

“ an y o ffi cer, em

p l o y ee, o r ag en cy

o f t h e Treas u ry Dep art m en t du l y au th ori zedb y th e Secret ary

o f t h e Treas ury d i rect ly , o r i n d i rect l y b y o ne o r m o re red el eg at i o n s
o f au th o ri ty , t o p erfo rm

th e fu n ct i o nm en t i o nedo r d es cri b edi nth e co n t ex t ”. Sec. 7 7 0 1 (a)(1 2 )(A)(i ). By reg u l at i o n s th e Secret ary h as ex t en d edth e au tho ri ty t o d et erm i ne d efi ci en ci es an dt o i s su e n o t ices o f d efi ci en cy t o th e Co m

m i s s io n er o f In t ern al Rev enu e an dt o d is tri ctd i rect o rs , d i rect o rs o f s erv i ce cen t ers , an dreg i o n al d i rect o rs o f ap p eal s . See s ecs . 3 0 1 .6 2 1 2-1 (a), 3 0 1 .7 70 1 -9 , Pro ced . & Adm i n . Reg s. Th es e reg u lat i o n s au th o ri ze t h e Co m m is si o n er t o red el eg at e t h e p erfo rm an ce o f s u ch fu nct i o n s t o o th er o ffi cers o r em p l o y ees u nd er h i s
s up erv i s i o n an dco n tro l ; the Co m m i s s i o n er m ay

al so au th o ri ze fu rth er d el eg at i o n
o f s u ch au th o ri ty

b y h i s d el eg at es . See s ec. 3 0 1 .7 7 01 -9 (c), Pro ced . & Adm i n . Reg s. As p erm i tt edb y

th es e reg u l at i o n s, th e au th o ri ty t o s i g n an di s s ue n o t i ces o f d efi ci en cy

h as b een red el eg at edu n der Del eg at i o n Ord er 4 -8 , In t ern al Rev en u e M an u al (IRM ) p t . 1 .2 .4 3 .9 (1 ), (2 ), an d(3 ) (Sep t. 4 , 2 0 1 2). Th e l i s to f p o si t i o n s
au th o ri zedu n d er Del eg at i o n Ord er 4 -8 i n cl u des “ Dep art m en t M an ag ers , Cam p u s- 9
-

[* 9 ] Co m p l i an ce Serv i ces (Sm al l Bu s i n es s / Sel f-Em p l o y ed )” an d“ Di rect o r, Retu rn , In t eg ri ty

an dCo m p l i an ce Serv i ces (W ag e & In v es t m en t ).” Id
. Th e n o t i ces o f d efi ci en cy i nqu es t i o n were s i g n edo nb eh al f o f t h e Co m m i s s i o n er b y

M s . Dav is i n h er cap aci ty as “ Pro g ram

M an ag er, Ret u rn In t eg ri ty an d Co m p l i an ce Serv i ces , In t eg ri ty an dVeri fi cat i o nOp erat io n ”. Th e
n o t i ces are i n al l res pect s s tan d ardan dex h i bi tn o i rreg u l ari ti es o f an y k i n d
. Si g n ifi can tl y , i n J ag o s v . Co m m i s s i on er, 2 01 8 W L 3 42 1 0 8 7 (6 th Ci r. Ju n e 2 1 , 2 0 1 8 ), aff’ g p er o rd er T.C. M em o . 2 0 1 7 -2 0 2 , th e Co urto f Ap peal s fo r t he Si x th Ci rcu i th el d th at M s . Dav i s , i n h er cap aci ty as a p ro g ram

m an ag er, h ad th e req u i s i t e au th o ri ty

u n d er Del eg at i o nOrd er 4 -8 t o i s s u e n o t i ces o f d efi ci en cy . 5 Nev ert h el es s , p et it i on er arg u es th atth e 2 0 13 an d2 0 14 n o t i ces o f d efi ci en cy are i n val i db ecau s e, h e s ay s , M s . Dav i s l ack edd el eg at edau th o ri ty t o i ss u e t h em . Pet i t io n er b ears th e b u rd en o f p ro o f i nth i s reg ard . See Perl m u t t er v .

5 In i t s o rd er affi rm i n g th i s Co u rt ’ s d eci s i o n, the Co u rto f Ap p eal s fo r t h e Si x th Ci rcu i ts t at ed : “ Th e p ro g ram m an ag er t h ati s su edth e J ag o s es ’ d efi ci en cy n o t i ce was a d el eg at e o f t h e Secret ary fo r t h i s p u rp o s e [o f i ss u i n g n o t i ces o f d efi ci en cy ] . IRM 1 .2 .4 3 .9 (3 ) (Sep t . 4 , 2 0 1 2 ).” J ag o s v . Co m m i s s i o ner, 2 0 1 8 W L 3 4 2 1 0 8 7 (6 th Ci r. J un e 2 1 , 2 0 1 8 ), aff’ g p er o rd er T.C. M em o . 2 01 7 -2 0 2 . W e t ak e ju d i ci al n o t i ce o f th i s Co u rt ’ s reco rd s , wh i ch s h o w th atCh ri s t i ne L. Dav i s s i g n ed th e n o ti ce o f d efi ci en cy

up on wh i ch J ag o s was p red i cat edan dthat , ju s tas i nth e i n s t an tcas e, M s . Dav i s s i gn edth e n o t i ce o nb eh al f o f t h e Co m m i s s io n er i n h er cap aci ty as “ Pro g ram

M an ag er, Retu rn In t eg ri ty an dCo m p l i an ce Serv i ces , In t eg ri ty an d Veri fi cat i o n Op erat i o n ”.- 1 0 -

[* 1 0 ] Co m

m i s si o n er, 4 4 T.C. 3 8 2 , 3 9 9 (1 9 6 5), aff’ d, 3 7 3 F.2 d4 5 (1 0 th Ci r. 1 9 6 7 ). Pet i t io n er b ears th i s b u rd en o f p ro of p art ly b ecau s e i t i s h e wh o h as m o v edt o d i s m i s s thes e cas es fo r l acko f ju ri s d i ct i o n , an d t h e “ n o rm al ev i den ti ary ru le” i m p o s es p ro o f o b l i g at i on s o n h i m as the m o v i n g p arty . Li l l i s v . Co m m i s s i o n er, T.C. M em o . 1 98 3 -1 4 2 (quo t i n g Un i t edSt at es v . Rex ach , 4 82 F.2 d 1 0 , 1 6 (1 s tCi r. 1 9 7 3 )), aff’ dwi th o utp ub li s h edo p i n i o n , 7 4 0 F.2 d9 74 (9 th Ci r. 1 98 4 ). M o re fu n d am en t al l y , h o wev er, p et i t i o n er b ears th e b u rd en o f p ro of b ecau s e o f t he p res u m p t i o n o f o ffi ci al reg u l ari ty . See i d . “ When ev er an o ffi ci al h as act ed , i ti s p res u m ed‘ th atwh at ev er i s req u i redt o g i v e v al i d i ty t o th e o ffi ci al ’ s acti nfact
ex i s t s.’ ” Id . (qu o t i ng Bo rg -W arn er Co rp . v . Co m m i s s i o n er, 6 60 F.2 d 3 2 4 , 3 3 0 (7 th Ci r. 1 9 8 1 ), rev ’ g T.C. M em o . 1 97 9 -3 5 0); s ee Ko h l i v . Go n zal es , 4 7 3 F.3 d 1 0 6 1 , 1 0 6 8 (9 th Ci r. 2 0 0 7 ) (ap pl y i n g t he “ wel l es t ab l i s h edp ri n ci p l e o f fed eral l aw th atad m i n i s trat iv e ag en ci es are en t i t l ed t o a p res u m p t i o nth atth ey

‘ actp ro p erl y
an d acco rd i n g t o l aw’ ” (q u o t i n g FCC v
. Sch rei b er, 3 8 1 U.S. 2 7 9 , 2 9 6 (1 9 6 5 ))); M eco m v . Co m m i s si o ner, 1 0 1 T.C. 3 7 4, 3 8 8 (1 9 9 3) (“ [P] ub l i c o ffi ci al s are p res u m edt o h av e p ro p erl y d i s ch arg edth ei r o ffi ci al du t i es .”), aff’ d, 4 0 F.3 d 3 8 5 (5 th Ci r. 1 9 9 4 ). As th e Sup rem e Co u rth as s t at ed : “ Act s d on e b y a p ub l i c o ffi cer

‘ wh i ch p res up p os e t h e ex i s ten ce o f o th er act s t o m ak e t h em l eg al l y o p erat i v e, are p res u m p t i v e p ro o fs o f t h e l at t er.’ ” R.H. St earn s Co . o f Bo s ., M as s . v . Un i t ed- 1 1 -

[* 1 1 ] St at es , 2 9 1 U.S. 5 4 , 6 3 (1 9 3 4) (q uo t in g Ban ko f t h e Un it edSt at es v . Dan dri dg e, 2 5 U.S. (1 2 Wh eat
. ) 6 4 , 7 0 (1 8 2 7)). 6 Pet i t i o ner h as o fferedn o ev i d en ce th atM s . Dav i s l ack edd el eg at edau th o ri ty t o i ss u e t h e n o t i ces o f d efi ci en cy . Rat h er, h e rel i es p ri m ari ly o n t h e fact th atth e
n o t i ces s h o w M s. Dav i s ’ p o s it io nas “ Pro g ram M an ag er, Ret u rn In t eg ri ty an d Co m p l i an ce Serv i ces , In t eg ri ty an dVeri fi cat i o nOp erat i o n ”--a p o s i t i o nn o t
ex p res s l y l i s tedam o ng th os e t o wh i ch Del eg at i o nOrd er 4 -8 d el eg at es au th o ri ty t o
s i gn an di s s u e n o t i ces o f d efi ci en cy . 7

6 Pet i t i on er rel i es o n M u n cy v . Co m m i ss i o n er, 6 3 7 F. Ap p ’ x 2 7 6 (8 th Ci r. 2 0 1 6 ), v acat i n g an drem an d i n g T.C. M em o . 2 0 1 4 -2 5 1, i n s up p o rto f t h e arg u m en t th atres p o n d en t h as the b u rd ent o d em o n s trat e t h atthe n o t i ces were i s s u edwi th p ro p er au th o ri ty . Pet i t i o n er’ s rel i an ce o np reced en tfro m th e U.S. Co u rto f Ap p eal s fo r t h e Ei g h th Ci rcu i t i s m i s p l aced g i v en thatan y ap p eal i nth es e cas es wo u l dp res u m ab l y

l i e wi th t he U.S. Co u rto f Ap p eal s fo r th e Ni n th Ci rcu i t . See s ec. 7 4 82 (b ); Go l sen v . Co m m i s s i o n er, 5 4 T.C. 7 4 2 , 7 5 7 (1 9 7 0 ) (s tat i n g th atwe g en eral l y “ fo l l o w a Co u rto f Ap p eal s d eci si o n wh i ch i s s qu arel y i np o i n twh ere ap p eal fro m

o u r d eci s i o n l i es t o th atCo u rto f Ap p eal s an d t o th atco u rtal o n e”), aff’ d , 4 4 5 F.2 d9 8 5 (1 0 th Ci r. 1 9 7 1 ). As d i s cu s s edab o v e, co n s i s t en t l y wi th Ni n th Ci rcu i tp reced en to ur d eci s i o n s req u i re t he t ax p ay er t o d em o n s trat e th at th e Co m m i s s i o n er o r h i s d el eg at es h av e n o tp ro p erl y d is ch arg edth ei r o ffi ci al du t i es . 7 Pet i t i on er al s o arg u es th atM s . Dav i s l ack edthe au th o ri ty t o s i g nth e n o t i ces o f d efi ci en cy b ecau s e, h e s ay s , th e ap p earan ce o f h er em p l oy ee i d en t i fi cat i o n nu m

ber i n at t ach m en t s t o th e n o t i ces s h o ws thats h e was th e “ Tax Ex am i ner”. Pet i t io ner ci tes In t ern al Rev en u e M an u al (IRM ) p t
. 4 .8 .9 .6 .1 (3 ) (J u l y 9 , 2 01 3 ): “ Tax ex am i n ers are n o tau th o ri zedt o s i g nn ot ices .” Th e qu o t edm at eri al up o n wh i ch p et i ti o n er rel i es ap p ears i nan IRM ch ap ter t h atap p l ies t o “ Sm al l Bu s i nes s an d Sel f-Em

p l o y ed(SB/ SE) Tech n i cal Serv i ces em p l oy ees ”, IRM p t
. (co n ti n u ed ...)- 1 2 -

[* 1 2 ] Th ere i s n o s tatu t o ry req u i rem en t, h owev er, t hatev i d en ce o f d el eg at ed
au th o ri ty b e em bo d i edi n Del eg at i o nOrd er 4 -8 o r an y o ther p art icu l ar d o cu m en t
. Th e reg u lat i on s p ro v i d e t h e Co m m i s s i o n er a wi d e ran g e o f ad m in i s trat i ve d i s cret i o n t o red el eg at e t o o ffi cers o r em pl o y ees u n d er h i s s up erv i s i o nan dco n tro l th e p erfo rm an ce o f fu n ct i o n s s u ch as i ss u i n g n o ti ces o f d efi ci en cy . See s ec. 3 0 1 .7 7 0 1 -9 (c), Pro ced . & Adm i n . Reg s . 8 Co n seq u en t l y , th e m ere fact th atM s . Dav is ’ p o s i t io n i s n o tex p res sl y l i s t edi n Del eg at i o nOrd er 4 -8 d o es n otd i s l o d g e th e p res u m

p t i o n o f o ffi ci al reg u l ari ty .

7 (...co n t in u ed ) 4 .8
. 9 (Au g . 1 1 , 2 0 1 6 ) (“ AUDIENCE”); “ Tax ex am i n ers ” are ex p res s l y i den t i fi ed i n thi s ch ap t er as o ne o f s ev eral en u m erat edcat eg o ri es o f “ Tech n i cal Serv i ces em pl o y ees ” au th o ri zedt o p rep are n ot i ces o f d efi ci en cy , IRM p t . 4 .8 .9 .6 (1 ) (J u l y 9 , 2 0 1 3 ). Th ere i s n o i nd i cat io n i n th e reco rdth atM s . Dav i s was atan y rel ev an tt i m e a Tech n i cal Serv i ces em

p l o y ee t o wh o m

thi s IRM ch ap t er wo u l dap p ly . M o re fu n d am en t al l y : “ Th e IRM l ack s th e fo rce o f l aw an dd o es n o t creat e ri g ht s fo r t ax p ay ers .” W ei s s v . Co m m i s si o n er, 1 4 7 T.C. 1 7 9 , 1 9 6 (2 0 1 6 ), aff’ d , 2 0 18 W L 2 7 5 9 3 8 9 (D.C. Ci r. M ay

2 2 , 2 0 1 8 ); s ee Urb anv . Co m m i s si o n er, 9 6 4 F.2 d8 8 8 , 8 9 0 (9 th Ci r. 1 9 92 ) (“ [C] o m p l ian ce wi th th e IRM ’ s req ui rem en t s i s n o t m an d at o ry [.] ”), aff’ g T.C. M em o . 1 99 1 -2 20 . Co n s equ en t l y , ev en i f we were t o as s u m e fo r t h e s ak e o f arg u m en tth atth e ci t edIRM d i rect i v e ap p l i edt o M s . Dav i s , i t w o u ldn o tren d er i n v al i d h er p erfo rm an ce o f fu n ct i o n s s h e was o th erwi s e au th o ri zedt o p erfo rm

wi th res p ectt o the n o ti ces o f d efi ci en cy . See s ec. 3 0 1 .7 7 0 1
- 9 (c), Pro ced . & Adm in . Reg s .

8 Al th o ug h Del eg at i o n Ord er 4 -8 , IRM p t. 1
. 2 .4 3 .9 (4 ) (Sep t
. 4 , 2 0 1 2 ), s t at es th atth e au th o ri ty

d el eg at ed th erei n “ m ay

n o tb e red el eg at ed ”, t h i s res tri ct i o nd o es n o tap pl y t o t h e Co m

m i s s io n er, wh o s e d el eg at edau th o ri ty an dau th o ri ty

t o red el eg at e ari s es n o tfro m an y d el eg at i o no rd er b u trat her fro m reg u l at i o n s . See s ecs . 3 0 1.6 2 12 -1 (a), 3 0 1 .7 7 0 1-9 (c), Pro ced . & Adm i n . Reg s .- 1 3 -

[* 1 3 ] As res p o n d en t ex p l ai n s , b efo re 2 0 1 5 Dep art m en tM an ag ers i n Cam p u s Co m p l i an ce Serv i ces (Sm al l Bu s i n es s / Sel f-Em p l o y edDi v i s io n ) o v ers aw t h e Fri v o l o u s Retu rn Pro g ram . See IRM p t . 1 .4
. 2 9 .1 (No v . 1 2 , 2 0 1 3 ), p t . 2 5
. 1 .1 4 .2 (4 ) (Ap r. 1 , 2 0 1 6 ), p t
. 2 5 .2 5 .1 0 .1 .3 (2 ) (Sep t
. 1 5 , 2 0 1 7 ). As th e res u lto f an IRS
reo rg an i zat i o n i n 2 01 4 , res p o n s i b i l i ty fo r t he Fri v o lo us Return Pro g ram was
m o vedt o th e W ag e an d In v es t m en tDi v is i on , Retu rn In t eg ri ty an dCo m p l i an ce Serv i ces , In t eg ri ty

an dVeri fi cat i o nOp erat i o n . See IRM p t . 2 5 .1 .1 4
. 2 (4 ) (Ap r. 1 , 2 0 1 6 ), p t . 2 5
. 2 5 .1 0 .1
. 3 (Sep t. 1 5 , 2 0 1 7 ). Res p o nd en t s t at es th atas a res u l to f t hi s
reo rg an i zat i o n , M s . Dav i s ’ “ au th o ri ty as ‘ Pro g ram

M an ag er, Ret u rn In t eg ri ty an d Co m p l i an ce Serv i ces ’ d eri v edfro m the t i t l e ‘ Dep art m en tM an ag er’ , Cam p us Co m p l i an ce Serv i ces ,’ a p o s it i on wh i ch i s l i s tedi nDel eg at i o nOrd er 4 -8
. ” Res po n d en td i rect s u s t o IRM p t . 1 .1 1.4
. 6 (1 )(3 ) (n o t e) (Oct . 1 0, 2 0 08 ), wh i ch
s t at es : “ If, du ri n g a reo rg an i zat i o n , p os i t i o n t i t les ch an g e, wi th ou ts ub s t an t i v e ch an ge i n res p o n s i b i l i ty , a d el eg at i o n o rd er i s s ti ll effect i v e fo r th e n ew p o s i t i o n t i tl e u n t i l th e d el eg at i o n o rd er i s rev i s ed
. ” Th e ci rcu m s t an ces an d co n t ex to f t h e 2 0 1 4 IRS reo rg an i zat i o nan dth i s IRM d i rect i v e l en ds up p ort t o th e p res u m p t i o no f o ffi ci al reg u l ari ty s u ffi ci en tt o s u s t ai n th e i n feren ce t h atM s . Dav i s p o s s es s edd el eg at edau th o ri ty t o s i g nan d i s s u e t h e
n o t i ces o f d efi ci en cy . Cf. R.H. St earn s Co . o f Bo s ., M as s ., 2 9 1 U.S. at5 8 -6 4- 1 4 -

[* 1 4 ] (h o l d i n g thata wai v er o f th e l im i t at i o n s p eri o d was effect iv e al th o u gh n o t
s i gn edb y th e Co m m i s s i on er u n t i l aft er t h e l i m i t at i on s p eri o dh adex p i red , s t at i n g th at“ th e p res u m

p t io n o f o ffi ci al reg u l ari ty was s u ffi ci en tt o s u s t ai nth e i n feren ce th atth e Co m

m i ss io n er o n h i s s i d e h ad d on e wh at ev er was ap p ro p ri at e t o g i v e
s up p ortt o h i s o wnact ” an d th at“ [c] h o i ce b et ween two d o ub t s s h o u ldb e m ad e i n
s u ch a way

as t o fav o r t h e p res u m

p t i o no f o ffi ci al reg u l ari ty ”); Un i t edSt at es v . Ah ren s , 5 3 0 F.2 d7 81 , 7 8 6 n . 8 (8 th Ci r. 1 9 7 6 ) (n o t i n g th at , i n acco rd an ce wi th
cu s t o m ary

p ri n ci pl es g o v ern i n g ev i d en ti ary p res u m p t i on s , ap p l i cat i o n o f t h e p res u m p t i o n o f o ffi ci al reg u l ari ty “ res t s up o np ro b ab i l i t i es , n o tcert ai n ti es ”). Pet i t io n er h as fai l edt o m eeth i s b u rd en o f p ro of t o o v erco m e t h e p res u m p t i o no f
o ffi ci al reg u lari ty

an ds h o w th atM s . Dav i s l ack ed s uch d el eg at edau th o ri ty
. M o reo v er, as res p o nd en tp o i n t s o u t , the co u rt s h av e co n s is t en t l y reject ed , i n
a v ari ety o f co n tex t s , ch al l en ges t o d el eg at edau th o ri ty t o s i g n an di s s ue n o t i ces o f d efi ci en cy . Fo r i n s t an ce, t h e Co u rto f Ap p eal s fo r t h e Ni nt h Ci rcu i t reject edan arg u m en tth ata n o t i ce o f d efi ci en cy was i n v al i db ecau s e i twas n ot“p ro perl y
s i gn ed ” as req u i red b y th e IRM ; th e Co u rt o f Ap p eal s ex p l ai n ed : (1 ) “ Th e In t ern al Rev enu e Co de d o es n o treq u ire t h e n o t i ce o f d efi ci en cy t o b e s i gn ed ” an d(2 ) t he Co m m i s s i o n er’ s “ co m

p l i an ce wi th th e IRM ’ s req u irem en ts i s n o tm an dat o ry .” Urb anv . Co m

m i s si o ner, 9 6 4 F.2 d8 8 8 , 8 8 9-8 9 0 (9 th Ci r. 1 9 92 ), aff’ g T.C. M em o .- 1 5 -

[* 1 5 ] 1 9 9 1 -2 2 0 . Si m i l arl y , th e Co u rt o f Ap peal s fo r t h e Fi fth Ci rcu i t reject eda t ax p ay er’ s arg u m en tth ata n o t i ce o f d efi ci en cy was i n val i db ecau se t h e IRS
em pl o y ee wh o s i g n edi tl ack edau th o ri ty t o d o s o ; the Co u rto f Ap p eal s s t at ed :

“ Th e ex is t en ce o f a s i gn atu re o r t h e i den t i ty o f an y IRS o ffi ci al wh o p ro vi d es o n e, i s s up erfl u o u s .” Sel g as v . Co m m i s s i o n er, 4 7 5 F.3 d6 9 7, 6 9 9 -7 0 0 (5 th Ci r. 2 0 0 7 ) (em p h as i s ad ded ); s ee al s o Tav an o v . Co m m i ss i on er, 9 8 6 F.2 d1 3 8 9 , 1 3 90 (1 1 th Ci r. 1 9 93 ) (h o ld i n g th atan u ns i g nedn o t i ce o f d efi ci en cy recei vedb y

th e t ax p ay er
was v al i db ecau s e i t“ ad equ at el y ad v i s edh i m thatth e Co m m is si o n er i n t en d edt o
as s es s h i m , n ot wi th s t an d in g t h atth e n o t i ce was u n s ig n ed ”), aff’ g T.C. M em o . 1 9 9 1 -2 3 7 ; Co m

m i s si o ner v . Os weg o Fal ls Co rp ., 7 1 F.2 d6 7 3 , 6 7 7 (2 dCi r. 1 9 3 4 ) (h o l d i n g th atan u n s i g n ed n o t i ce o f d efi ci en cy was v al i d an ds t at in g th at“ [t ] h e
s t atu te d o es n o treq u ire t h ati tb e s i g n ed ”); Bat s ch v . Co m m i s s i o n er, T.C. M em o . 2 0 1 6 -1 4 0 (reject i n g as fri v ol o u s th e t ax p ay er’ s arg u m en tth at n o t i ces o f d efi ci en cy were i n v al i d b ecau s e t h ey were s i g n edb y IRS em p l o y ees wh o l ack edp ro p er d el eg at edau th ori ty ), aff’ ds ub n o m . Hy d e v .Co m m i s s i o n er, 6 9 5 F. Ap p ’ x 1 6 6 (8 th Ci r. 2 0 1 7 ); Ban i s ter v . Co m m i s s io n er, T.C. M em o . 2 0 1 5 -1 0 , at* 9 (reject i n g
as fri v ol o u s the t ax p ay er’ s arg um en tth atth e n ot i ce o f d efi ci en cy was i n v al i d b ecau s e i twas “ n o t s ig n edb y anau th o ri zedp ers o n ” an di m p o s i n g a p en al ty

u n d er- 1 6 -

[* 1 6 ] s ect i o n 6 6 73 ), aff’ d , 6 6 4 F. Ap p ’ x 6 7 3 (9 th Ci r. 2 0 1 6 ) (i m p o si ng an ad d it i o n al p en al ty

u n d er s ect i o n 6 6 7 3 ). W e co ncl u d e an d h o l d th atth e s ub jectn o t i ces o f d efi ci en cy are v al i d. Co n s equ en t l y , we wi l l d en y p et i t i on er’ s m o t i on t o d is m i s s th es e cas es fo r l acko f juri s d i ct i o n . II. Un rep o rt edIn co m e Th e Co m m is s i o n er’ s d et erm i n at i o n s i na n o t i ce o f d efi ci en cy are g en eral l y p res u m edco rrect , an dth e t ax p ay er b ears th e b urd en o f p ro v i n g t h o se d et erm i n at i o n s erro n eo u s . See Ru l e 1 4 2 (a); W el ch v . Hel v eri n g , 2 9 0 U.S. 1 1 1 , 1 1 5 (1 93 3 ). In cas es i nv o l v i ng fai l u re t o rep o rti nco m e, th e U.S. Co u rt o f Ap p eal s fo r t h e Ni n th Ci rcu i th as h el dth atth e Co m m i s s i o n er m

us tes t ab l i s h “ s o m e
ev i d en t i ary

fo u n d at i o n ” l in k i n g th e t ax pay er t o an al l eg edi nco m e-p ro du ci n g act i vi ty b efo re t h e p res u m

p t i o n o f co rrect nes s at t ach es t o th e d efi ci en cy d et erm i n at i o n . W ei m ers k i rch v . Co m m i s s i o n er, 5 9 6 F.2 d 3 5 8, 3 6 1 -3 6 2 (9 th Ci r. 1 9 7 9 ), rev ’ g 6 7 T.C. 6 72 (1 9 7 7). On ce th e Co m m i s s i o ner h as es tab l i s h eds u ch a fo u n dat i o n , th e b u rd en o f p ro o f s h i ft s t o th e t ax p ay er t o p ro v e b y a p rep o n d eran ce
o f t h e ev i d en ce t h atth e IRS’ d et erm i n at i o n s are arb i traryo r erro n eo u s . See Hard y
v . Co m m i s s i o n er, 1 8 1 F.3 d1 0 0 2 , 1 0 0 4 (9 th Ci r. 1 9 9 9), aff’ g T.C. M em o . 1 9 9 7 -9 7.- 1 7 -

[* 1 7 ] Res p o n d en td et erm i n edth at fo r t ax ab le y ears 2 0 1 3 an d2 0 14 p et it i o n er recei v edwag es i n the am ou n t s th atCH2 M an dAn v il rep o rt ed t o th e IRS o nFo rm s W -2 . Res p o n d en tal so d et erm i n edth atfo r t ax ab l e y ear 2 0 1 3 p et i t i o n er recei v eda $ 3 6 ,8 3 0 t ax ab l e d is tri b u t i on fro m a qu al i fi edret i rem en tp l an as Fi d el i ty rep o rt ed
o n Fo rm 1 0 9 9 -R. Pet i ti o n er s t i p u l at edth ath e wo rk edfo r CH2 M du ri n g 2 0 1 3 an d 2 0 1 4 an dth ath e wo rk edfo r An v i l i n2 0 1 4. CH2 M ’ s p ayro l l rep o rtan d p ayro l l reg i s ter s h o w i tp ai d p et i t io n er $ 1 4 9 ,8 0 2 i n 2 0 13 an d$ 1 65 ,0 1 1 i n2 0 1 4. An v i l ’ s p ayro l l jo u rn al s h ows i tp ai d p et i t i o n er $ 1 0 , 5 8 9 i n2 0 14 . Fi d el i ty ’ s can cel ed ch ecks h o ws i t p ai d p et i t i on er $ 3 6 ,8 3 0 i n 2 0 1 3 . Pet i t i o n er at t ach eda Fo rm 4 8 5 2 t o h i s 2 0 1 3 t ax retu rn i n di cat i ng th ath e h adrecei v ed a $ 3 6 , 8 30 d i s tri b u ti o nfro m Fi d el i ty . Onthe b as i s o f al l th is ev i d en ce, we h av e n o d i ffi cu lt y co ncl u d in g th at
res p o n d en t h as es t ab l i s h edan ad equ at e ev i d en t i ary fo u n d at i o nfo r th e unrep o rt ed i n co m e. Th e b u rd en o f p ro o f t h u s s hi ft s t o p et i ti o n er t o s h o w th atres p o nd en t ’ s d et erm i n at i o n s were erro n eo u s . 9

9 Sec. 6 2 0 1(d ) p ro vi d es th ati f, i n an y co u rtp ro ceed i ng , a t ax p ay er fu l l y co o perat es wi th th e Co m

m i s s i o n er an drai s es a reas o n ab l e d i sp u t e wi th res p ectt o an i n fo rm at i o n retu rn , th e Co m m i s s i o n er h as th e b urd en o f p ro du ci n g reas o n ab l e an d p ro b at i v e ev i d en ce t o v eri fy th e i n fo rm at i o nreturn . Pet i ti o n er h as n otrai s eda reas on ab l e d i s p u t e un d er s ec. 6 2 0 1 (d ) wi th res p ectt o an y i t em o f i n co m e rep o rt ed o n th e i n fo rm at i o n return s up o n wh ich res p o n d en t ’ s ad ju s t m en t s are b as ed
.- 1 8 -

[* 1 8 ] Pet i t i o ner h as n ots at i s fi edh i s b u rd en o f p ro o f. He d oes n o t d en y recei v i ng th e am o un t s i n qu es t io n an dm ak es n o m ean i n g fu l arg u m en tt o s h o w wh y th e i n co m e h e recei v edwas n o t t ax ab l e. 1 0 Cf. s ec. 6 1 (a) (g ro s s i nco m e i n cl u des “ al l i n co m e fro m

wh at ev er s ou rce d eri ved ”). W e co ncl u d e t hatres po n den t's d et erm i n at i o n s o f u n rep o rt edi nco m e as s etfo rt h i nth e n ot i ces o f d efi ci en cy fo r 2 0 1 3 an d2 0 1 4 are co rrect , an dth o s e d et erm i n at i o ns are s u s t ai ned . See Hard y v . Co m m i s s i o n er, 1 8 1 F.3 dat1 0 04
. III. Sect io n 7 2 (t ) Ad d i t io n al Tax Wh en a t ax pay er recei v es a d i s tri b ut i o n fro m a qu al ifi edret i rem en t p l an , s ect i on 7 2 (t )(1 ) g en eral l y p ro v i d es th ath i s t ax s h al l b e i n creas ed“b y an am o u n t equ al t o 1 0 p ercen t o f t h e p o rt i o n o f s u ch am o u ntwh i ch i s i n cl u d i b l e i ng ro s s i n co m e.” Th e s t atu t e p ro v i d es v ari o u s ex cep ti o n s , e.g ., wh ere t h e t ax p ay er recei v i ng th e d i st ri b u t io n h as at t ai n edth e ag e o f 5 9 1⁄2 . See s ec. 7 2 (t )(2 )(A)(i ).

1 0 Atv ari o us p o i n ts i n th es e p ro ceed i n g s p et i t i on er h as rai s edfri vo l o u s an d g ro u nd l es s arg um en t s s i m i l ar o r i d en t i cal t o th o s e t hath e rai sed --an dth atth i s Co u rtan dth e Co u rto f Ap p eal s fo r t h e Ni n th Ci rcu i treject ed --i na p rev i o u s cas e rel at i n g t o h i s 2 0 1 0 an d 2 0 11 t ax ab l e y ears , Harri s s v . Co m m is s i o n er, T.C. M em o . 2 0 1 7 -5 , aff’ d , 7 7 6 F. Ap p ’ x 4 2 5 (9 th Ci r. 2 0 1 9 ). In th atearl ier cas e t hi s Co u rt cau t i on edp et i ti o n er t h ati f h e co n t in u ed t o ad v an ce fri vo l ou s o r g ro u n d l es s arg u m en t s h e m ig h ti n cu r s ub s tan t i al p en al t i es u n der s ec. 6 6 7 3 (a). Id
. at* 1 5 . W e ren ew t h atwarn i n g t o day
.- 1 9 -

[* 1 9 ] Becau s e s ect io n 7 2 (t ) i m p o s es a “ t ax ” rat h er th ana “p en al ty ”, “ ad d i t i o nt o t ax ”, o r “ ad d it i o n al am o u n t ” wi th i n t h e m ean i n g o f s ect i o n6 7 5 1 (b ) an d (c) o r
s ect i on 7 4 9 1 (c), p et i ti o n er h as th e b u rd eno f p ro du ct i o no nth is i ss u e. See Grajal es v . Co m

m i ss io n er, 1 5 6 T.C. _

_ (J an . 2 5 , 2 02 1 ) (h o l d i n g th atth e Co m m i s s i o n er i s n o treq u iredt o s h o w wri t t en s up erv i s o ry ap p ro v al u n der s ect i o n 6 7 5 1 (b ) o f a s ect i on 7 2(t ) ex act i o n ); El v . Co m m i s s i o n er, 1 44 T.C. 1 4 0 , 1 4 5 -1 4 9 (2 0 1 5) (h o l d i n g th atth e Co m m i s s i o n er b ears n o b u rd en o f p ro du ct i o nu n d er
s ect i on 7 4 9 1 (c) as t o the s ect i o n 7 2 (t ) ex act i o n ). In p art i cu l ar, p et it i o n er b ears th e b u rd eno f p ro vi ng en ti t l em en t t o an y ex cep t i o n u n d er s ect i o n7 2 (t )(2 )(A). See Bu n n ey v . Co m m i s s i on er, 1 1 4 T.C. 2 5 9 , 2 6 5 -2 6 6 (2 0 0 0 ). Pet i t i o ner h as al leg edn o fact s an dp ro du cedn o ev id en ce s h owi n g th ath e h ad at t ai n edth e ag e o f 5 9 1⁄2 wh en h e recei vedth e d i st ri b u t i o no r t h atan y o th er
s t atu to ry ex cep t i o n ap p l i es . Acco rd in g l y , we wi l l s u s t ai nres p o n d en t 's d et erm i n at i o n th atfo r t ax ab l e y ear 2 0 1 3 p et i t i o ner i s l iab l e fo r an ad di ti o n al t ax o f $ 3 ,6 8 3 u n d er s ect io n 7 2 (t ). To refl ectthe fo reg o i n g an d res p on d en t ’ s co nces s i o n s , Anap p ro p ri at e o rd er an dap p ro p ri at e d eci s i o n s wi l l b e en t ered
.